What Kenya can teach us about banking the under-banked

This recent video report from BBC News is a wonderful example of the use of new forms of data in assessing credit and loan applications. It tells the story of Uber driver Eunice Wambui who was able to secure car finance thanks to her customer ratings.

For banks in Kenya, struggling to get their hands on ‘traditional’ data to assess credit and loan applications, such alternative data sources can open the door to previously excluded potential customers.

For the many Kenyans who don’t have a bank account or a credit score and have trouble getting finance, it means the chance to further their careers or improve their lives.

Their plight is echoed around the globe. At the end of 2015 the National Small Business Association reported that 27 percent of small US firms cannot obtain adequate financing. Globally, PwC puts the unmet deposit demand of the un(der)banked at $360 billion.

In a world of data, trends show up in review sites and other crowd-sourced platforms long before financial reports catch up.

Through clever use of new forms of data, innovation can help pave the way towards banking the under-banked.